DEA Proposes Raising Registration Fees

The Drug Enforcement Administration (“DEA”) published a Notice of Proposed Rulemaking (“NPRM”) on July 6, 2011 seeking to raise initial registration and renewal fees for all registrants. 76 Fed. Reg. 39,318 (July 6, 2011). Citing increased diversion control activities, DEA justified increasing fees for the second time in five years. DEA also explained the different fee-setting methodologies it considered, including the one selected, that would increase fees for each category of registrants. The proposed fees for all registrants would increase by 33%.

The Controlled Substances Act authorizes DEA “to charge reasonable fees relating to the registration and control of the manufacture, distribution, and dispensing of controlled substances and to listed chemicals.” 21 U.S.C. § 821. DEA is required to set registration fees “at a level that ensures the recovery of the full costs of operating the various aspects of” the Diversion Control Program. 21 U.S.C. § 886a(1)(C). Thus, registration fees must be “reasonable” but must cover all costs of the Diversion Control Program.

DEA listed its historical diversion control activities in the NPRM in addition to salary and other costs related to the Diversion Control Program’s expanded mission since the last fee adjustment in 2006. DEA cited a number of factors justifying the fee increase including:

Expansion and use of Tactical Diversion Squads comprised of DEA diversion investigators and special agents, state and local law enforcement and regulatory officers conducting criminal investigations. (There were 37 operational Tactical Diversion Squads as of March 2011, and since 2006, DEA added 161 special agent positions, the majority assigned to Tactical Diversion Squads. 76 Fed. Reg. 39,324);

Improved information technology capabilities for the Controlled Substances Ordering System (“CSOS”), Automated Reports and Consolidated Orders System (“ARCOS”) and the Drug Theft/Loss database; and

Implementation of the Combat Methamphetamine Epidemic Act of 2005, the Methamphetamine Production Prevention Act of 2008 and the Combat Methamphetamine Enhancement Act of 2010 requirements.

DEA asserts in the NPRM that it “will be unable to continue current operations” without increasing fees, and will violate the requirement that it set fees at a level that ensures the recovery of the full costs of operating the Diversion Control Program. To that end, DEA considered four different fee-setting methodologies, explaining the benefits and disadvantages of each. DEA selected a weighted-ratio methodology to determine the reasonable fee for each category of registrant that would increase future registration fees for all registrants by 33%.